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OnLive reveals new owner, says everyone got wiped out

Cloud gaming company OnLive provided some additional details on its abrupt sale of assets Sunday night, including some information about its first new investor. The company, which let go of all of its employees Friday, only to give less than half of them offers for a job with its new owner, said that an affiliate with original investor Lauder Partners is the first investor in its new corporate entity. It also confirmed that all shareholders, including investors, employees and management, got wiped out.

A release sent out to reporters Sunday night explained the asset sale this way:

“OnLive, Inc.’s board of directors, faced with difficult financial decisions for OnLive, Inc., determined that the best course of action was a restructuring under an “Assignment for the Benefit of Creditors.” The assignee of the company’s assets then sold all of OnLive, Inc.’s assets (including its technology, intellectual property, etc.) to the new company.”

The new company will bear OnLive’s name, and one of investors will also look somewhat familiar: The release stated that “an affiliate of Lauder Partners was the first investor in the newly-structured company.” Lauder Partners was part of OnLive’s Series C, and the San Jose Mercury News had reported Friday that Gary Lauder himself had invested in OnLive’s new corporate entity.

The company also said in its press release that it is looking for additional funding, in part to hire back some of the employees that have now been let go. The sacked employees will have the option to consult for the newly formed OnLive in exchange for options in the new company. Of course, one has to wonder how many are going to accept such an offer, given that all their previous shares just lost all of their value.